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Thursday, January 24, 2008

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» creative capitalism from NextBlitz
We have to find a way to make the aspects of capitalism that serve wealthier people serve poorer people as well was the theme of Bill Gates' presentation at the World Economic Forum today (more here in the WSJ). It [Read More]

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Dan Goodman

Dave - love your blog, even more that you include stuff like this. Creating new asset classes is an interesting idea. I'd love to see it. But how do you envision there being a financial return on investment in the classes you mention (and describe in your previous post)? Capitalism works because individuals can invest in assets and receive a financial return. You're talking about creating incentives for individuals and corporations to invest in worthy things like human health and a clean environment, but I don't see how a financial return can be had on that. Good things to do, no doubt, but not for financial reasons (unless there's a goodwill boost, like what is presumably motivating Wal-Mart). In order for there to be a financial return to an investor in an environmental cleanup project, for example, someone else would have to be willing to PAY for the clean environment. My suspicion is that Gates is going to talk about governments establishing financial incentives for investment in these things, in the form of things like tax credits. That way an individual (or a corporation) can get a financial return on an investment, but it's not the same thing as securitizing something abstract like human health.

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